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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Washington 10, Dell 10, Obama 10, California 9, America 7, Us 6, Ben Bernanke 5, Boehner 5, Kate 5, Robert Costa 4, Kate Obenshain 4, Geico 4, John Boehner 3, U.s. 3, Don Clark 2, Hilton 2, David Walker 2, John Harwood 2, Lipitor 2, Lance Armstrong 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    January 14, 2013
    7:00 - 7:59pm EST  

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for every ink cartridge you recycle when you spend $50 on hp ink. staples. that was easy. there's a lot of chatter today about dell. at one point it stopped trading 9 and 12 and change. let me give you my feeling on dell. michael dell is a man with integrity who is fed up with the stock. they have moved dramatically away from pc. 50% of the business is overseas and they do a lot of enterprise work. i think michael dell is a motivated person who may actually do something to bring out value. even though typically i would not recommend the stock on a takeover basis, dell is very cheap and i think if it sells off, don't worry about it. dell may actually be right here.
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just for you, right here on "mad money," i'm jim cramer and i will see you tomorrow! good evening, everyone. i'm larry kudlow. this is "the kudlow report." it's getting nasty again. today, president obama promises not to compromise on the debt ceiling. as usual he demonizing -- demonizes republicans for hurting our elderly and the troops. meanwhile the white house won't deliver its own budget in time and still wants to raise more taxes. we're about to hear a response from a republican house member. that's not all. fed chief ben bernanke is saying it must raise the debt ceiling and that the fed is going to keep buying bonds for now. on this one-month anniversary of the heinous, awful newtown
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shootings, the sheriff comes out in favor of banning assault weapons. "the kudlow report" begins right now. first up tonight, president obama slams the republicans. he says no gimmick, no magic coins. just the plain old standoff on the debt ceiling. who is gonna blink first in this? john harwood joins us from washington with the details. good evening. >> good evening. the president used the last news conference of first term to draw an ever-brighter line with congressional republicans on the debt ceiling. they say they want dollar for dollar spending cuts to be matched with an increase in the debt ceiling. the president said i'll negotiate with you, but not over the debt ceiling. he simply is not going to allieu republicans to take the full faith and credit of the united states and the health of the u.s. economy as hostages. >> they will not collect our
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ransom in exchange for crashing the american economy. the financial well-being of the american people is not leveraged to be used. the full faith and credit of the united states of america is not a bargaining chip. and they better choose quickly because time is running short. >> now, house speaker john boehner responded quickly saying house republicans will do the right thing. they will be responsible, they will meet america's obligations and make sure the government does not shut down. he tried to take that specter off the table. but this is a very tough fight that's getting more and more problematic, larry, because the president said he's going to break the habit of crisis-driven fiscal negotiations. if he's going to succeed in that, somebody is going to have to break and it may have to be soon because treasury secretary geithner said this afternoon we could hit the debt ceiling and exhaust all the extraordinary measures he's been taking as soon as one month from now.
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>> you know, john, 2010, 2011, the 2012 he negotiated. he voted against the debt ceiling i believe in 2006. why all of a sudden does he not want have to have negotiations? >> i think will's happened, larry, is that the president spent 2011 and 2012 with republicans squeezing him on his priorities, having opposed him during the first two years of his presidency. then that really had the wind at their back. the tea party election of 2010 had given republicans very big numbers on the hill. and he's decided that he backed up, and he backed up and he backed up, and he's not going to back up anymore. he took his argument to the american people in the election. he won the election. they held the house, that is true. but he's decided that he's been vindicated by public opinion broadly, and he's going to try to hold that ground. the question is going to be, larry, at the end of the year on the tax issue, he had the hammer behind him of the expiration of all the bush tax cuts.
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he does not have that hammer right now. what he has is the prospect of a catastrophic standoff between republicans and democrats on the hill and against the white house and can he get his way, impose his way the way he did to some degree in the fiscal cliff negotiations? we're going to find out pretty soon. >> yes, we will. many thanks, john harwood, appreciate it. joining us now exclusively with the gop response, the new chair of the republican study committee, steve scalise from louisiana. so we're going to be a deadbeat nation and this is important, republicans are anti-old folks, anti-young people, anti-sick people. all of those horrible things. what's year you action, sir? >> you know, it just sad this is what president obama is going to become in his second term. he seems to be the only person in washington that wants to talk
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about the nation defaulting on its debt. i think there's nothing that could be more irresponsible for somebody to suggest that america would default. i don't want us to do that. but just remember the debt ceiling the fact that we're hitting up against this max on our credit card again is a symptom of the spending problem in washington and president obama doesn't want to recognize that that problem exists. >> when you say no one is talking about defaulting on the debt, does that also include letting the debt ceiling lapse? >> well, you know, larry, what we're once again up on the debt ceiling. we have been here before, a year and half ago we were having this debate again. i supported a plan cut cap and balance that would have focused on solving the problem. but clearly we haven't sold the problem and credit card is maxed out again and president obama wants to get that money from china and send the bill to the kids. so any deal to solve this latest crisis ought to include a solution to their actual problem
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that got us here. >> is john boehner's role still in place? one for one for every dollar of debt increase there should be a dollar of spending reduction? >> i think you need a start with that. then you've got to actually put real programs in place that solve this problem long term. because look, if we don't solve this problem coming up in the next few weeks, we're going to be back here in another few months because president obama's racked up all this spending. he doesn't want to control the spending he's already accrued so he wants more money on the credit card. so, you know, if we're going to pay off the previous bills which we ought to do, we also need to fix the problem that got us here in first place. >> just one point coming back. nobody doubts we have enough revenues, we the united states government have enough revenues to cover the interest on the debt. no one doubts that. but it's the rest of the budget, the idea of prioritizing payments, there's about 80 million accounts, that's an awful tough thing to do. >> it is. we take in about $2.5 trillion a year, the federal government
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does. and yet of course the federal government is spending over $3.5 trillion as year so that gets you the deficit. but the actual debt payment, are less than 90 cents on the dollar that we take in. so even if the president as he should should pays our debts, that leaves him with 90 cents on every dollar that comes in to fund the other priorities of government and he wants to threaten not to pay that debt service. i think that's irresponsible of the president to be suggesting default on the debt. we ought to be talking about a bipartisan solution to the spending problem that got us here in the first place. >> i have heard talk in the republican conference about a one or two or three month extension on the debt ceiling. and on a continuing resolution for the budget to run the government. is that one to three month solution not still on the table? >> well, larry, we're proposing a number of different solution, both short term and long term.
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frankly, president obama needs to start rolling up his sleeves and focusing on both instead of sitting over in the white house and kind of throwing out all the threats to everybody across the country and running around campaigning as if he's still running for office. you know, the election is over. president obama actually has to start governing and addressing the problems and frankly the spending problem is one of the biggest reasons right now why we're in this dilemma. >> you're still going full bore on the spending sequester? full bore, spending sequester? >> we need to address the spending problem in washington from many different fronts. that's one of those fronts. there are a lot of others. and again, president obama refuses to talk about any of them. he doesn't think we have a spending problem. well, then why is our nation hitting the credit card limit again? because the government is spending too much. we have to solve that problem. >> many thanks. appreciate it, sir. >> great being with you. let's bring in our panel to talk about this. we have molly ball with the
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atlantic. kate, author of "divider in chief." and robert costa from the national review. if i wanted a deal, i wouldn't insult, demonize and pound away at the opposition. he certainly to use a cnbc phrase is not rising above partion. where does he get off doing this? >> larry, this is the politics of what happens in washington. president obama went to the podium today and he outlined the hard-line position. this was red meat for the liberal base. we know though just as we saw in the fiscal cliff that a deal will have to be struck to avoid a government shut down. i think he ultimately he will come to the center, depends how much. >> kate, i don't think america is a deadbeat nation and i don't think republicans are deadbeats because they want to cut spending. which is really the big problem. >> yeah, this president has zero interest in cuttings or discussing cutting spending. he's made it clear, carnie made it clear. obama wants to destroy the
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opposition here. saying that the republicans are holding a gun to the head of the american people, that was a shocking statement that they want to limit payments to the elderly and yet again children with disabilities. this man knows no shame and he is not -- i do not believe he has any interest in coming to the negotiating table. i think he's just using this and his 50 or 53% approval rating as another chance to drive the nail into the coffin of the republican opposition. >> well, molly, on top of that, one little hypocritic thing. when the president was a senator in 2006, he voted against the debt ceiling. i just want to note that. i know it's 2013, but he voted against it. in fact, the senators, chuck schumer and harry reid and those who signed that letter, they all voted against the debt ceiling too. now, how does obama come away with that kind of history and accuse the republicans of shutting down the government and demonizing them? how does he do that?
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>> well, i think there's a long history of partisan hypocrisy and deal making on this deal. what we see obama doing is trying to take control of that political fight so that those who would get political advantage by say voting against raising the debt ceiling which tends to be popular. people -- you know, the american public, they hear debt ceiling and they think no, let's not do that. that sounds awful to give government more money to spend. he's trying to turn it around. but it absolutely is a dynamic that he exemplploited when he w senator. >> robert costa, let's look at this for a minute. republicans have a tricky situation. because the country does not want us to default. and this whole business of managing accounts and prioritizing, there's 80 million payment accounts. i know the interest on the debt will be paid, but to some extent the gop has got to watch itself, robert. they could come really at the
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wrong end of a massive public relations blunder. >> that's exactly right, larry. the president's press conference today really was first battle in this public relations war. what matters is that the president is out there for an hour, making his case to the american people. what the republicans need to do a better job is making their case. now, it's easy to point fingers on capitol hill and say, well, obama did this as a senator, obama did that. but what matters is this moment. what matters is now. can republicans articulate a message on the debt ceiling that gets beyond the beltway and really connects? obama is betting that he can resonate more than house republican. >> i'm thinking the gop has to get back to the message of spending cuts and oh, by the way, the president today called for higher taxes. i think boehner has got to shut that down. we already had a tax hike. >> listen, the republicans have got to do something massively different. the playbook is not working. boehner and mcconnell came out today with these milquetoast reactions to obama's explosive rhetoric. they said, it's a very, very
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hard problem and we need to be responsible. look, obama is saying that republicans are holding a gun to their head. that republicans don't care about old people or children with disabilities. we have got to get better about arctic lating what is the impact of spending cuts. are we really headed towards bankruptcy like greece? yes. we have to use the same enthusiasm in explaining our position and put some folks out there who have some passion and can actually reach the american people because this is not working. >> all right. well, passion. you may be looking at the wrong party. we'll see. passion. molly, kate, robert, thanks. look, we have been looking at the politics of this spending night. now time to look at the economics. ben bernanke is speaking out about this and you'll hear what ahead to say. later on the president says he'll reveal his exact gun control plans later this week. it surely will include a call to ban assault rifles.
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now the newtown police chief is speaking out for such a ban and obama wants to use executive orders for it. this includes solvency and spending limits and limited government. we'll be right back. ...so as you can see, geico's customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated. it's not real. geico's customer satisfaction is quite real though. this computer-animated coffee tastes dreadful. geico. 15 minutes could save you 15 % or more on car insurance. someone get me a latte will ya, please? officeyour business needs...k...
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president obama challenges the republicans not to raise the debt ceiling. well, in an hour-long press conference today, we have two money men in the administration who also weighed in about this standoff. jackie deangelis has more on ben bernanke and timothy geithner. good evening. >> good evening. in an afternoon address at the university of michigan, ben bernanke addressed it. he said it allows the government to pay the bills and it's something that government must do periodically. congressional action wouldn't create new spending or add to the deficit either. regarding his hope that the process goes smoothly, he said the following. >> i do hope that congress will allow the government to pay its bills, not raise the possibility of default. which would be very, very costly to our economy.
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and then address very seriously these fiscal issues. >> this was bernanke's first speech since the release of the fed's latest meeting minutes which caused a stir because it indicated some policymakers wanted to end the bond buying program before year end. meantime, in a letter to congressional leaders including boehner, tim geithner urged lawmakers to raise the limit on the nation's debt, or risk irreparable harm. the credit worthiness is not a bargaining chip or a hostage that could be taken to advance a political agenda. the last time the debt ceiling debate occurred, standard & poor's downgraded us. and that was in august of 2011. >> thank you, jackie. according to "the wall street journal," ber nan i can did suggest that the government would keep buying the bond, they'll keep buying them. my two cents on the debt ceiling
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business. republicans ought to stay away from the issue. that's the first thing. stay away from the debt ceiling issue. stay away with government shutdowns. they're political poison and p.r. disaster. instead, on the spending sequester, $1.2 trillion stay with the spending sequester. i believe john boehner should stick with his one to $1 debt increase with a dollar spending cut. and then go to the new budget. paul ryan, where are you? we need more spending cuts, more entitlement reform and even some tax reform especially business tax cuts to spur economic growth. my two cents. here is an old friend, david walker, founder, president and ceo of the come back america initiative. he knows a lot about this. david, let me ask you this. is boehner wrong to insist that a dollar debt increase should be accompanied by a spending decrease? >> the fact is we need to pay
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our bills. and i do however think that we have a spending problem. the federal government has gone from being 2% of the economy, 100 years ago. to 24% today. headed to 37% by 2040 absent a change in course. the republicans ought to leverage the sequester and the c.r. not to shut down the government, but we need to reduce spending. we also have to keep in mind if you try to hold the debt ceiling hostage, social security is negative cash flow. therefore, that means you could face a situation where the social security checks don't go out on time. the last time we faced that, it was 1983. and that was the only reason we got reforms. that would be a disaster. believe me if we allowed that to happen. >> i agree. i think the idea of prioritizing accounts after the interest on debt is insane. but, you know, boehner doesn't want to give obama a free lunch on the debt ceiling. they did that a year ago, they
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still haven't passed the se yestercuts. what i'm saying, why not at least launch a compromise? obama has compromised before in the past. heck, he's even voted against the debt ceiling in the past. >> well, we clearly need a compromise. we need to reduce spending, we need to impose tough statutory budget controls. need a real credit card, that's constitutional limit. we're the only country on earth that has a debt ceiling limit. so let's get real and try to do something that's more -- that's more appropriate and more effective than we have had in the past. ultimately we need to build a bridge to a grand bargain later this year which includes social insurance reforms and comprehensive tax reform. that will make it simpler, fairer, more competitive and generate more revenues. >> you know, on that taxes, i am just beside myself with the desire to have business tax cuts.
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large and small business tax cuts. i think we should have done this four years ago. >> i definitely think that we have to streamline, simplify the corporate tax code. we need to move to territorial and take the top rate down to 25%. permanent r&d tax credit. we need to give a deduction to dividends districted. let's lower the top rates to 25%, which makes it simpler, much more competitive and i think that's the way forward. >> did you hear today any sense, any tone of compromise on taxes and spending and the rest of it from the president's news conference? >> not yet. frankly, i think we have too much rhetoric and not enough results. people are still acting as if we're in the campaign cycle. the campaign is over. it's time to govern. the country has serious challenges that get worse with the passage of time. i have in front of me, larry, a
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fake $10 million bill. our federal financial hole gets deeper 10 million a minute, $100 billion a week they do nothing. it has a real cost. >> it sure does. at least you don't have a $1 trillion platinum coin. could have been worse. >> i have a $1 trillion bill. it has about as much substance as that platinum coin. >> david walker, thank you. as always, you're terrific to help us out. a new question now. is wall street dissing washington's debt drama? are the markets actually used to the idea of lawmakers going to take everything to the brink? market didn't too bad today. the dow is up 19 points. we have seine brown from lord abbott. so the markets are saying, oh, we have seen this before, we know you guys are going to get it together? not worried? >> i think so wall street is so worn out from all the garbage that went owithin the -- on with the fiscal cliff. why should we get excited, it's
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not going to be anything to get excited about until it comes right down to the line -- >> we're a month ahead. >> that's right. we're four to six weeks ahead. >> all right. >> and there are ugly clouds on the horizon. i mean, the fiscal cliff was a friendly family discussion compared to this hatfield/mccoy environment that's unfolding with regard to spending. >> so you think this whole story is going to have some real heart-stopping moments for the markets? >> i think there will be huge consequences. recall that in the summer of 2011 the last time we faced this that the dow went down 1800 points in july and august. now, granted there were some other issues in europe that were a concern. but we could see some serious consequences as a result of these -- this inability to have a discussion on spending cuts. >> i know you're a bond specialist, but apple reducing their iphone orders and so forth. apple fell 3.5% today. $18 to 501. is this apple reduction in ipad
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orders, is this symbolic of an economy that's getting weaker? >> well, i think so. i think -- well, we have heard some people say that, yes, it's part apple. the company. but also, i think it is symbolic of just people not having enough certainty of what kind of money they will have in the future to spend on items such as what apple offers. >> at the same time, on the plus side, perhaps two private equity firms want to buy dell. dell computer. now, that's interesting. >> yep. i think that's certainly a possibility. i'm not sure where real value is in dell. it would be interesting to see what they do with dell. certainly their business model is very antiquated. so they need to pair them up with somebody else who has the capability that apple does. >> some people think that the business model is right today where it should be about $12 right here. the stock closed at $12.50. that's what -- >> that may be the business
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value, but the model itself is pretty antiquated in terms of focusing only on laptops and hard top computers. not really being on the forefront of tablets and iphones and things along those lines. >> last one. ben bernanke in his speech at the university of michigan did strongly suggest according to news reports that the fed will keep on buying bonds. you are a bond guy. do you think people should stay in bonds, do you think the fed will keep buying $85 billion per month? >> i think they probably don't have a choice at this point. they're the only game in town in terms of trying to hold this economy and country together. they'll continue to buy them, but i wouldn't buy them. let the fed buy them. you know, we have talked on this show before about the other end of the fixed income spectrum. high yield. that actually outperformed the s&p 500 last year. so i'd say there is opportunity in stocks. stocks have done amazingly well, despite what's gone on in washington. high yield bonds on the fixed income side have done well. >> good sage advice.
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thank you. now, folks, look at the cubans lining up for freedom. they're sick of communism. we'll have that story next up on "the kudlow report." she's still the one for you -
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tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. all right. some breaking news all of a sudden. we now have a new date for when hillary clinton will testify before congress to answer
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questions about the terrorist attack on the u.s. diplomatic facilities in benghazi. today, ed roy says mrs. clinton will appear before the committee on wednesday, january 23rd. that's a week from this wednesday. and more breaking news. now a source tells the associated press that lance armstrong has just admitted to taking performance enhancing drugs. he made that admission during an interview he's taping right now with oprah winfrey. that interview will air this thursday, once again, at 7:00 p.m. tour de france winner lance armstrong reportedly admits to using performance enhancing drugs to help him win those races. he has already been stripped of those titles. all right. we move on, major step toward opening up cuba. cubans will be allowed to travel outside the country without government approval. we have more. michelle? >> it's an historical day, absolutely. there are thousands of people in line in cuba today.
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today was the first day where it was much easier to leave. before the changes that went into place today, people had to get an exit visa, permission from the government to leave. they had to have letters from -- of invitation. it was exceedingly difficult to leave. that is no longer the case. when these changes were announced several months ago, a lot of skeptics within the island outside the island said, is this really going to happen? well, today, yanni sanchez, the most famous dissident blogger there, she tweeted about how she'd apply for a passport and try to leave. and today she tweeted wow, they tell me that i will get my passport in early february. and she is going to travel to a social media conference as a result. what's also important is even though you want to leave, you won't necessarily be stigmatized. they won't seize all of your belongings as they used to do in the old days. so some pretty significant changes. why are they doing this, larry?
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money. the cuban government won't say that socialism has failed, but they have acknowledged that the government can't employ 100% of the population so they'll start firing government workers. it would be a lot easier for them if they left. second, every time people leave, they send cold, hard cash via remittances back to the island and the cuban government desperately needs that cash. >> all right. you answered the question i was going to have, why the communists suddenly doing it. you answered it. michelle caruso-cabrera, thank you. you may have missed the gun control push, but the police chief from newtown called for a banning on the assault weapons this weekend. why aren't the others joining him? we'll talk about that with a former fbi special agent next. [ male announcer ] where do you turn for legal matters? maybe you want to incorporate a business. or protect your family with a will or living trust. and you'd like the help of an attorney. at legalzoom a legal plan attorney is available
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it's one month since the heinous newtown atrocities that killed all the little baby angels and their educators. now the police chief in newtown is calling for an assault weapons ban. ann thompson has the latest from there. >> reporter: good evening, larry. there's a new organization called sandy hook promise.
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it is a group of residents including some parents and family members of victims who want commonsense solutions to prevent school shootings from happening again. this is a group that says it is nonpolitical. it is nonpartisan. and it doesn't have an agenda. other than to have a national discussion about what to do to keep these tragedies from happening again. they want to look at mental health issues. they want to look at the issue of violence. and they want to look at the issue of guns. in fact, they're not talking -- calling it gun control here. they call it gun responsibility. they want gun owners at the table. in fact, i talked to one of the founders tonight who said that he thinks the gun owners may be the key to solving this problem because they have the knowledge as to how to keep guns in responsible people's hands. there is a lot of pain here as you can imagine.
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today is the one-month anniversary of those shootings that killed 26 people at sandy hook elementary school. that school is still a crime scene. the students who survived have been moved to a building in a nearby community, but the community here is still trying to figure out just what they're going to do with that building. that's the latest from newtown. larry, back to you. >> many thanks. ann thompson. the newtown police chief has come out with his own message to washington, d.c. listen to this. >> ban assault weapon, restrict those magazines that have so many bullets in them. >> meanwhile, new york is further restricting its assault weapon ban and limit the size of magazines from ten to seven bullets. are we getting closer to a national assault weapons ban? let's talk with don clark, he's a former fbi special agent in charge of the new york and
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houston divisions. and we welcome back kate obenshain and robert costa. mr. clark, what do you think about this? banning the assault weapons, putting limitations on the bullet magazines and better background information? >> i think we have to have better background information, larry. we have got to find out who we're selling guns and have a record so that we know who has guns, who will have guns in their hands. and that's a process that's supposed to have been in, but that's got to continue right now. in terms of assault weapons and so forth, as far as i'm concerned those are combat weapons to be used. i don't know what social involvement there should be with the -- with that type of weapon like that. so i'm certainly one that says let's move these things aside and use them in the appropriate behavior. hopefully we won't have any more wars but that's where they should go. >> kate obenshain one of the quotes, was this crazy kid had more firepower than his own
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people have. and there is kate, a new "washington post" poll out, 58% support an assault ban. >> i think a lot of politics out there are using this tragedy to try to ram through some gun control measures that have a lot of gun proponents extremely concerned. you heard it in the president's speech today. where he said that gun owners need to -- and those who support gun rights need to examine their conscience, suggesting those who are in favor of second amendment rights have some sort of lack of sympathy with the parents of the children who were slaughtered in this horrible situation. i think we need to be very wise and realize that some of these guns that the politicians are going after, the semiautomatics are the most popular guns bought for self-defense. we need to look at whether these measures are actually going to have an impact or not and a lot
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of them are just political and are not going to keep our children safer. >> robert costa, we heard from senator joe manchin over the weekend and others. they want a broad base. they said you're not going to get a semiautomatic ban unless you have bettered attention to mental illness and obama today said that the gun lobby people were ginning up fear among americans who otherwise want reform. where is this thing going to play out? >> larry, i just walked over here in the u.s. capitol. the house is now back in session. i spoke with some lawmakers. especially among republican legislator, there's not a clamor to move towards an assault weapon ban, but there's a real discussion about background checks, about limiting the amount of bullets that could be in a magazine. and these are only preliminary discussions. so what president obama did today by talking about an executive order, he is trying to
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urge this process along, but it's a long way away from being a legislative reality. >> don clark, i appreciate your thoughts on the ban. i'm surprised that the police organizations which i believe would much prefer a ban just as the chief of the newtown police department would, i'm surprised they have been so silent. >> well, i think they may be silent for a particular reason, trying to get all of their -- if you will, their ducks in order if they come out with a standing on this that they have something to stand on. that's what i really think they're doing, rather than -- and really trying to get together with each other and to see what direction that they should get, to get the public to really join them together. so that they will believe when they come out with the statement that said this is what we need to ban, that they won't get it thrown back. >> all right, they were very, very present and visible back in the 1994 debate. now, let me move on on this topic. washington is focusing on new
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gun laws to prevent tragic shootings like newtown, but we can't forget about getting better care for people with serious mental illness. here now is health care policy analyst dr. stephen green. welcome. you're going for better mental illness i guess processes. this may not be about the guns, and you're saying that antidepressants may be the problem here. it doesn't have a strong ring to me, but go ahead and make your case. >> well, i was just asked to come on to talk about antidepressants, but if your question is do they contribute, there's a lot of evidence -- let's just back up. antidepressants are well known to increase suicide. these shooters were suicidal. so that's -- >> why do so many people use them? you're a surgeon. >> well, they make a lot of money. >> you're a psychiatrist. we all know people who are using antidepressants. many, many of them live more comfortably and better lives.
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i understand if you have an extreme, extreme violent character that may happen with or without antidepressants. >> anti-depressants are used a lot because they're an industry and like a lot of drugs, lipitor, what have you, they have been promoted. the evidence actually in the new england, "jama" shows, they're questionably effective at best and there's also a lot of evidence to show they do harm. so i'm not convinced that they're drugs that should be used by many people. and the relationship to suicide is well known and these shooters are also suicidal. >> now, you're saying then, you're trying to make a link to the antidepressants in the mass shooters. let me ask you this. these mass shooters may be -- i'm going to use the word -- they may be nuts anyway. >> sure. >> they may be extreme, violent. i just don't -- i mean, anybody -- the point is if they didn't have access to a gun they wouldn't be able to do this. i'm not anti-gun.
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but i'm anti-some guns that i think the police should have. isn't that the fact though, that mental illness, maybe they should go back into the institution and not worry about a bunch of pill. >> absolutely. mental illness needs to be treated. i'm totally for an assault weapon ban myself, just to let you know. >> right. >> but there's a lot of issues to this. and -- >> but you're not going to say blankly that antidepressants are bad and hurt everybody? >> unrelated to the gun issue, antidepressants don't work. >> as a surgeon -- >> as a financial analyst who has been covering the stocks i know the literature better than most psychiatrists. i can show you the reports in the new england journal. >> some of the finest doctors in the country prescribe them. >> well, that's what marketing will do. >> you think that's all it is, it's about marketing, it's not about the mental health of the patient? >> doctors are very influenced
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by big box marketing, yes. lipitor is overused. if you haven't had a heart attack and you're on lipitor, you might not need it. so -- >> we'll leave it there. we'll have to have a better debate on that. steve green and our panel, thanks very much. now, up next, california raises taxes on the rich. oh, yeah, here we go again. california hasn't erased the budget deficit. we have our expert on california and taxes and deficits, he'll be up next. see life in the best light. outdoors, or in. transitions® lenses automatically filter just the right amount of light. so you see everything the way it's meant to be seen. maybe even a little better. visit your eyecare professional today
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office superstore ink retailer in america. now get $6 back in staples rewards for every ink cartridge you recycle when you spend $50 on hp ink. staples. that was easy. california raised taxes on the rich. and so far, the impact has been, well, nonexistent. cnbc's own robert frank has the details. >> good evening. well, it sounds like the perfect california dream. at least for politicians. in november, voters passed the 13.3% for the highest earners. that's the highest in the country. a month later, well, presto, income tax revenues exploded. surging $760 million more than expected. that sudden wind fall along with other revenues led to a very rosy outlook for 20013. governor brown said he'll have a
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balanced budget in 2013 after years of the massive deficits, but it may be a mirage. here's why. budget experts say that december money was a one off tied to the fiscal cliff. the wealthy of course took gains in december, so they could avoid those higher tax rates in 2013. now, the revenues from the new california tax rates won't kick in until this quarter or later. that means they could have a rude awakening this month or next when that money doesn't arrive. as brad williams, a california budget expert told me, we suspect those added revenues were related to the federal tax changes rather than the state tax rates. it shows that california is more dependent now than ever on the wealthy. the top 1% of earners pay up to half of the state's income taxes, but the revenues for the rich are harder than ever to predict because they can manage their income. as you always say, tax rates matter. >> tax rates matter. actually, it could be both. it could be that the california
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tax hike, the capital tax hike, the dividend. if they build in that base line they're going to be badly wrong. badly mistaken. >> exactly. and that's the problem. when you say, okay, our new spending rate is based on this mountain of money that we have in december, it's not repeated and you and i both know it won't be, that's where the problems will come with another deficit. >> i think it's an economy-wide problem. fourth quarter may be stronger than people think for this reason, but it's coming out of the first quarter when the tax effect takes place. robert frank, thank you very much. we appreciate it as always. all right. when we come back, where does president obama come off blaming republicans for running up the debt? he is the biggest debt creator in chief in american history. the gop wants to cut spending. what exactly is wrong with that? i will ask our panel right after this.
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talk about not rising above partisanship, president obama's news conference today not only didn't include any talk of compromise, but he wheeled out the old nasty cliches about the republicans not caring about the old and the sick. let's welcome a former obama campaign aide joining our panel. kate obenshain and robert costa. kate, besides talking about how republicans hate the sick, hate the young, hate everybody -- >> disabled. >> yeah, disabled.
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sorry about that. he also made sure to include that he wants more taxes. more taxes. obama care taxes are already kicking in. we just had a tax increase on investors and small businesses. can you beat that, more taxes? >> this should come as a surprise to nobody, larry. obama's goal is not some sound economy when he -- as his legacy, his goal is as to fundamentally transform america where we have a vastly expanded size of government. he won't talk about cuts except little ones on the side. but he wants to continue to expand government. he doesn't care about deficits. he's not going to deal on this. >> you know, a couple of times during the news conference, i was interested in this. president obama said to congress, go ahead, give me the power and i'll issue more debt. that's really what he wants. he wants the power to issue unlimited debt so he can have unlimited spending and eventually he's going to get around to unlimited tax hikes. >> well, to be clear, as you know, when we talk about the debt, the president doesn't get to decide, you know, how much we're spending that's something
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that rests with congress. but in terms of what kate was saying with respect to, you know, him wanting to not really offer any cuts he's incurred the wrath of his party by offering chain cpi to social security. that's a reindexing of the cost of living index, revising down how much elderly people are getting. and he talk about potential fixes to medicare, potentially raising the age. it is not true that he's not willing to do that. i'll say there are a lot of people on the left who are not happy with him at all for that. >> i get that, but robert costa, i know the president says that. blake is right. but the democrats in the senate hate it. they hate it. democrats in the house, they hate it. they hate any cuts at all. especially these little mini, weenie entitlement cuts that don't change any structures. robert costa, obama wants this power, doesn't he? he wants unlimited power to keep increasing the debt because his party wants him to keep on spending.
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isn't that the bottom line of this whole story? >> oh, obama is very effective at pushing the republican party into a corner. remember, in the fiscal cliff he gets the republicans to cave on their pledge. they would allow some tax rates to go up after the fiscal cliffs happen and now he's saying to himself, the republicans did that on taxes. let me see if i can get more taxes and revenue as part of the debt ceiling. this is a political game he's playing. >> kate, i have to tell you, i goes 30 seconds. you said it first. gop needs a clear message, don't they? a clear message. >> they better get one really fast, larry, because what the -- what the president does terrifies them when he threatens to blame them. when he says that they hate all of these different interest groups, women, poor people, that is so effective. we need the real courageous conservatives, where is paul ryan? you said it earlier, where is marco rubio, where are the articulate champions of smaller
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government and economic prosperity? they need to get out in front. >> i'll tell you what else, kate, they need a growth message. economic growth because i'm sorry, blake, but we're still plugging along at 2%. and it's not good. and the president can't keep blaming george w. bush. blake zeff, kate obenshain, robert costa. we'll be here tomorrow night. [ male announcer ] this is sheldon, whose long dy setting up the news
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starts with arthritis pain and a choice. take tylenol or take aleve, the #1 recommended pain reliever by orthopedic doctors. just two aleve can keep pain away all day. back to the news.